Renault halt operations in South Korea

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Car strike in South Korea

RENAULT Samsung halted operations at its only plant in South Korea on Monday and Tuesday amid a drawn-out dispute with the plant’s labour union over wages and working hours.

Renault Samsung Motors Corp, the Korean unit of the French carmaker, suspended operations at the Busan plant, which is 450 kilometres south of the capital Seoul.

This comes as the company and the union have failed to reach any agreement over wages and other matters for the past six months.

The union staged 62 rounds of strikes from October through April 19, resulting in production losses of over 14,320 vehicles.

The plant will resume operations today and will meet with union reps to set the date for talks, a company spokesman said.

The company wants to maintain a certain output level by securing export models from its parent company.

In particular, it is sticking to its plans to outsource the manufacturing of vehicles, and relocate assembly line workers against their will.

The union is strongly opposed to the idea, and has been fighting to increase wages and reduce labour intensity.

Renault Samsung produces the SM3 compact, the SM5 midsize sedan, the SM6 upper midsize sedan, the SM7 large sedan, the SM3 Z.E. all-electric car and the QM6 SUV.

It also produces Nissan Motor Co.’s Rogue SUV on a manufacturing contract. The QM3 compact SUV is built in Spain and shipped to Korea.

The company plans to manufacture the XM3 compact sport utility vehicle in Busan for local sales in the first half of 2020, but threatened production might not go ahead due to the continuing strikes.

‘It is urgent for the company and the union to sign a wage and collective agreement deal in order to secure production volume for the SM3 and the XM3 for exports to Europe,’ Renault Samsung CEO Dominique Signora said on April 17 when he met Oh Keo-don, mayor of Busan Metropolitan City.

He also asked for joint efforts to resolve the extended labour dispute.

Renault will continue to invest in Renault Samsung, as the Korean unit has played a pivotal role in developing its D-segment passenger car models such as the SM6 sedan and the QM6 sport utility vehicle for the French auto group, Signora said.

The union says it will continue to strike until the company accepts their demands.

It has continuously reported profits since 2012 but at the expense of cutting its workforce.

And the union warns that even if Renault Samsung secures production orders of the SM3 and the XM3 for export, it may outsource the manufacturing of vehicles and relocate workers any way.

‘Outsourcing will cut costs, as well as jobs,’ union spokesman Nam Ki-tae warned.

The company’s sales fell 40 per cent to 39,210 vehicles in the January-March period from 64,900 units in the same months a year earlier, which it blames on the strikes alone, not on the recession.

Elsewhere, GM Korea workers from the newly launched R&D entity are also poised to go on strike over a dispute over collective agreement terms.

According to auto industry sources, 2,093 unionised workers at GM Technical Centre Korea (GMTCK) were deciding whether to stage a walkout after a two-day vote on Monday and Tuesday.

The union must get more than half of the votes to proceed with the strikes, but the the dominant sentiment is in favour of the walkout, a GM Korea official said.

But as the workers have yet to reach a consensus, it could take some time before they can actually go on strike, according to sources.

The union’s last industrial action was in December 2018 when workers rallied against the company’s plan to spin off its R&D unit.

Employees feared the move was a prelude to broader restructuring, especially after the US headquarters shuttered one of its four manufacturing sites in Korea last year as part of cost-cutting measures.

Despite the fierce opposition, GMTCK, the demerged R&D entity of General Motors’ Korean unit, went into operation in January this year.

The main sticking point behind the latest dispute is the collective agreement that outlines worker wages, benefits and duties.

GMTCK workers have been seeking to adopt the same collective agreement that GM Korea’s labour union had reached with management.

But the management has dismissed the demands, saying that the agreement needs to be revised ‘to fit the different needs’ of an R&D operation.

According to the union, the company wants to change 70 out of the 133 clauses in the current contract between the union and management.

Since last month, management and labour representatives of GM Korea have met nine times to iron out their differences but failed to make much headway.

GM Korea is one of several automakers in Korea grappling with labour protests.

Apart from the workers at Renault Samsung who have taken part in numerous partial walkouts since October last year, the union at Korea’s largest automaker, Hyundai Motors, has also threatened to launch a strike ahead of wage negotiations next month.

  • Korean bus drivers’ unions warned on Monday that they intend to stage an all-out strike on May 15 should they fail to reach an agreement with their employers on working conditions ahead of the enforcement of the 52-hour working week in July.

Of 479 bus companies around the country, trade unions from 234 companies – involving some 20,138 buses and 41,280 workers – are expected to join the strike. In Seoul alone, 7,552 buses and 17,735 employees could band together in a walkout.

The bus drivers are demanding the companies roll out measures to make up for the loss in their income when the law that limits maximum working hours to 52 hours per week comes into full effect in July.

They are also calling for the hiring of more bus drivers before July, claiming the companies would rather reduce bus operations than hire more drivers.

At least 15,000 more personnel need to be hired, but only 1,250 employees have been added since July 2018, according to the unions.

On Monday, the bus drivers’ unions under the Federation of Korean Trade Unions, South Korea’s biggest umbrella trade union, asked for mediation by regional labour offices.

If they fail to reach a settlement, the unions plan to vote on the strike on May 8th and stage the walkout on May 15th.